According to an analysis published in the Tax Strategy Group papers, a higher rate of capital gains tax levied on people with higher incomes could bring more than 50 million euros each year to the national treasury. Finance Minister Paschal Donohoe had pledged to consider raising the rate of capital gains tax (CGT) for high-income earners during the review in last year’s finance bill committee,
If the overall CGT rate increased from 33% to 40% for people earning more than €200,000, it should bring an additional €53 million each year to the public treasury, according to provisional calculations by the Tax Strategy Group. If the revenue limit were set at €300,000, the potential additional return is valued at €36 million.
The articles point out that it is impossible to judge exactly the likely return, given the possible change in behavior of the individuals involved. Some other jurisdictions have varying rates of capital gains tax, he said, although in the UK the highest rate threshold is the amount of the gain, not the income of the beneficiary.
In terms of stamp duty, the papers say work is underway on proposals for a levy on the construction sector to be applied from 2023 to cover part of the cost of bad blocks supplied by industry and containing mica and pyrite. The government had previously indicated that the issue of a levy would be considered, and the document says “significant technical work” is underway to design a properly targeted levy. No estimate is given of the probable amount that this would generate.
The papers also reveal that the Treasury raised €9.1 million in stamp duty due to new measures introduced to make it more expensive for investment funds to buy houses en bloc from a housing estate. A rate of 10% applies since May 2021 to any acquisition of 10 or more properties over a 12-month period. Apartments are excluded.
The acquisition of 345 houses was the subject of 243 declarations until April this year, indicating that some purchases by funds are continuing despite the stamp duty. The newspapers say it is important to note that the charge is just one of the measures introduced by the government in the housing market.
In the area of corporate tax, the newspapers report that a review of the Knowledge Development Box, a special tax incentive introduced to try to entice SMEs to invest in research and innovation, is currently underway. . The program was introduced in 2016 and has seen very little use.